Netflix on global spree

Look at what people steal to find out what they want

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Netflix is bullish about its international expansion strategy and will be aggressively rolling out the platform to more territories and acquiring rights for global content, according to chief content officer Ted Sarandos.

“We have been in Canada over a year and have now surpassed BitTorrent as the biggest carrier of digital content,” he told the Mipcom audience in Cannes.

He says the model’s success proves that “we are better than free. Good, well priced, dependable content will beat piracy.”

Netflix is currently looking at how to acquire more and more content rights internationally for streaming. “Hollywood to the world is big business but the world to the world is bigger business,” he said. For Sarandos personalization via advanced recommendation systems will be key to driving Netflix’s international growth. “The old tools don’t seem to work anymore for internationalizing content. We have invested in and gotten very good at personalization,” Sarandos said.

Netflix will be using its recommendation algorithms to push new Netflix exclusive TV show Lilyhammer, starring Steven Van Zandt, to seed the programme with viewers who are into the genre. An early iteration of the concept was used with Starz show Spartacus which was promoted to Netflix users who like the film 300.

"We really think we can use these same algorithms to launch a show very rapidly, and put it in the hands of the people who'll love it the most," he said.

Sarandos said that 50-60% of Netflix viewing is now TV shows, with audiences showing a renewed appetite for serialized content like MadMen and Breaking Bad.

“When we have conversations with TV buyers the first thing they ask is how do we access the digital rights,” he said. Sarandos dismissed concerns about piracy, saying that “consumers don’t really want to pirate. What they want is a great service and easy delivery.”

He added that music industry’ woes provided great lessons: “When consumers tell you what they want, give it to them. Figure out a way to give it to them, because they will figure out a way to get it.” He quipped “and if you want to know what they really want, just look at what they are stealing.”

Netflix partner Miramax is using cross platform distribution to expand its digital reach to audiences via services like Netflix and Hulu, and launching its own direct-to-consumer offering on Facebook, iPad and Google TV. Miramax CEO Mike Lang said, "in a way I'd like to believe our company is a bit more Silicon Valley than Hollywood."

He added "we believe that cross-platform is key to growing the digital transactions business. We believe that all these different platforms can be complementary and co-exist together. We think everything starts with the consumer. They're not focused on windows or on what schedule they can watch something or on which device.”

Lang concurred with Sarandos that the content industry faced bigger problems than piracy.

“Piracy really is not the bigger issue for our company or for our library,” said Lang. “It’s been lack of exploitation, just not getting it out there.” ®